Mexico's army claimed a victory against the country's most powerful drug cartel after troops cornered and killed the man reputed to have founded the multibillion-dollar methamphetamine trade.

Ignacio "Nacho" Coronel was shot dead yesterday when soldiers raided a house in a wealthy suburb of Guadalajara, the army said. Witnesses heard gunfire and explosions as troops and helicopters closed in.

"Nacho Coronel tried to escape, and fired on military personnel, killing one soldier and wounding another," army spokesman General Edgar Luis Villegas told a press conference in Mexico City. "Responding to the attack, this capo died." Coronel was accompanied by one aide, who was arrested.

Coronel was credited with originating the mass production of synthetic drugs in Mexico. According to the FBI, which offered a $5m (£3.2m) reward for his capture, he was "the forerunner in producing massive amounts of methamphetamine in clandestine laboratories in Mexico, then smuggling it into the US".

He was one of the three most important figures in the Sinaloa cartel, led by Joaquin "El Chapo" Guzman, who often features in the Forbes list of the world's richest and most powerful people.

The Sinaloa cartel is one of five crime syndicates contesting a turf war across Mexico. Its main rivals are the Zetas, a cartel that grew out of a paramilitary hit squad formed by military deserters.

After years of uneasy co-existence, fighting between the rival groups broke out in 2005, but the violence spiralled after the Mexican president, Felipe Calderón, deployed tens of thousands of soldiers and federal policeagainst the gangs in December 2006. Since then, 26,000 people are estimated to have died in drug-related violence.

Coronel's death comes amid mounting allegations that Calderón's tactics have favoured the Sinaloa cartel, or at least hit the other organisations far harder. Coronel was widely rumoured to be living in the Guadalajara area long before the army surrounded him.

"The government has been under pressure to prove that they are not protecting the Sinaloa cartel," investigative journalist Ricardo Ravelo told CNN en Español.

Coronel is believed to have been born in the northern state of Durango, which with the neighbouring state of Sinaloa is home to some of Mexico's most powerful drug lords.

He began his trafficking career in the 1980s under the tutelage of Amado Carrillo Fuentes, leader of the Juárez cartel and nicknamed the "Lord of the Skies" because of his use of planes to transport drugs. The importance of the Juárez cartel began to wane after Carrillo Fuentes died after plastic surgery in 1997.

Coronel was one of a group of traffickers who teamed up with Guzman after the latter's escape from a high-security jail in a laundry van in 2001. Despite his relatively low profile, some analysts believe Coronel's importance was on a par with the other Guzman and fellow Sinaloa kingpin Ismael "El Mayo" Zambada.

He reputedly controlled a large part of the trafficking routes for Colombian cocaine heading up the Pacific coast towards the US market, and had developed smuggling networks to Europe as well.

"This is without doubt the most spectacular blow against drug traffickers yet for President Calderón," the prominent columnist Raymundo Riva Palacio told W Radio. "His power and his contacts extended across 10 countries in three continents."

Riva Palacio said Coronel's demise was more significant than that of Arturo Beltrán Leyva, the leader of a cartel named after him, who was killed in a navy operation last December. Beltrán Leyva's death unleashed a power struggle that is believed to be one of the factors behind this year's escalation of the violence.